Managing people strategically
Week 1
What is the difference between HRM and SHRM?
Definitions of HRM (Human Resource Management):
HRM refers to all the activities involved in managing employment
relationships within a firm. It encompasses the management of both work
and people in organizational contexts. Fundamentally, HRM is an inevitable
process that arises with the growth of organizations, ensuring that work is
structured and people are effectively managed.
Definitions of SHRM (Strategic Human Resource Management):
SHRM is the strategic approach to managing human resources to align
workforce skills and behaviors with the overarching goals of the
organization. It focuses on planned human resource deployments and
activities designed to achieve sustained competitive advantage by
leveraging human capital effectively. SHRM integrates HRM with strategy
to create a unified framework aimed at maximizing organizational
performance.
Delivery of HRM:
HRM can be delivered in two primary ways. In its traditional form, HRM
consists of a collection of discrete practices that lack explicit or discernible
links. However, a strategic approach transforms HRM into an integrated,
coherent bundle of mutually reinforcing practices. These practices are
strategically designed to support the organization’s goals.
Components of HRM:
1. HR Strategies: These provide direction by outlining the
organization’s human resource objectives.
2. HR Policies: These act as guidelines that describe how values,
principles, and strategies should be implemented.
, 3. HR Processes: These are the formal procedures used to put
strategies and policies into action.
4. HR Practices: These are the practical approaches for managing
people, linked to organizational objectives.
5. HR Programs: These serve to enable the implementation of
strategies, policies, and practices.
How SHRM Differentiates Itself:
SHRM represents the intersection of HRM and strategy. By integrating the
two, SHRM seeks to position human resources as a source of competitive
advantage.
- Contingency Approach emphasizes the alignment of HR policies
with the firm's strategy, often referred to as achieving a "best fit" or
vertical alignment.
- Configurational Theory highlights the internal consistency of HR
practices, known as horizontal alignment or “bundling,” where
practices are related and mutually supportive.
How Human Resources Contribute to Sustained Competitive
Advantage:
Human resources can drive sustained competitive advantage through two
key mechanisms:
1. Human Capital Advantage:
This occurs when the workforce is of high quality, meaning
employees are skilled, motivated, and adaptable.
2. Human Process Advantage:
This is achieved when a firm has established effective processes that
enable employees to work cohesively and efficiently.
Both mechanisms are heavily influenced by HRM practices and systems,
which must be strategically designed and implemented.
When Do Human Resources Lead to Sustained Competitive
Advantage?
According to the Resource-Based View of the Firm (RBV), competitive
advantage arises from a firm’s unique configuration of internal resources.
For human resources to contribute to this advantage, two conditions must
be met:
- Resources and capabilities must vary significantly across firms
(heterogeneity).
- These differences must be stable and difficult to transfer or replicate
(resource immobility).
,The VRIO Framework provides criteria for assessing whether resources
can sustain competitive advantage. Resources must be:
- Valuable: Contribute to organizational goals.
- Rare: Not widely possessed by competitors.
- Difficult to Imitate: Not easily replicated or substituted.
- Organized: Supported by systems and structures that enable their
effective utilization.
Clustering of HR Practices (HRPs):
HR practices can be conceptualized in two primary ways:
1. Control vs. Commitment:
The control approach emphasizes strict rules, supervision, and
punishment.
The commitment approach focuses on fostering employee
loyalty through training, rewards, and empowerment.
Continuum? No, independent, can be simultaneously
implemented
2. AMO Framework (Ability, Motivation, Opportunity):
Ability: HR practices aim to ensure a skilled workforce
through comprehensive recruitment, rigorous selection, and
training.
Motivation: Practices like performance management,
competitive compensation, incentives, and job security ensure
motivated employees.
Opportunity: Practices such as flexible job design, work
teams, and employee involvement empower employees to
achieve organizational objectives.
, Together, these frameworks explain how HRM enhances organizational
performance by increasing employee abilities, motivation, and
opportunities.
IMPORTANT
- SHRM is about aligning HRM with Strategy
- Horizontal and vertical alignment are important!
- Managing HR (people!) is important as they provide human capital
advantage and human process advantage
- Competitive advantage through VRIO
- Who is in the pool (capital) and how they behave (process) is
influenced by HRPs
- HRPs are clustered in HR systems
Control versus commitment
AMO
Features of HRM Systems:
HR systems have two critical dimensions:
1. Content:
This dimension defines what HR systems include, such as individual
practices and policies designed to achieve organizational objectives.
Content is driven by the organization’s strategic goals and may
include high-performance work systems or best practices
tailored to achieve a best fit.
2. Process:
This dimension explains how HR systems are designed and
administered. Strong systems deliver unambiguous messages,
creating shared meaning across the workforce about desired
behaviors. Effective design and implementation ensure that HR
systems are impactful and aligned with organizational goals.
Week 1
What is the difference between HRM and SHRM?
Definitions of HRM (Human Resource Management):
HRM refers to all the activities involved in managing employment
relationships within a firm. It encompasses the management of both work
and people in organizational contexts. Fundamentally, HRM is an inevitable
process that arises with the growth of organizations, ensuring that work is
structured and people are effectively managed.
Definitions of SHRM (Strategic Human Resource Management):
SHRM is the strategic approach to managing human resources to align
workforce skills and behaviors with the overarching goals of the
organization. It focuses on planned human resource deployments and
activities designed to achieve sustained competitive advantage by
leveraging human capital effectively. SHRM integrates HRM with strategy
to create a unified framework aimed at maximizing organizational
performance.
Delivery of HRM:
HRM can be delivered in two primary ways. In its traditional form, HRM
consists of a collection of discrete practices that lack explicit or discernible
links. However, a strategic approach transforms HRM into an integrated,
coherent bundle of mutually reinforcing practices. These practices are
strategically designed to support the organization’s goals.
Components of HRM:
1. HR Strategies: These provide direction by outlining the
organization’s human resource objectives.
2. HR Policies: These act as guidelines that describe how values,
principles, and strategies should be implemented.
, 3. HR Processes: These are the formal procedures used to put
strategies and policies into action.
4. HR Practices: These are the practical approaches for managing
people, linked to organizational objectives.
5. HR Programs: These serve to enable the implementation of
strategies, policies, and practices.
How SHRM Differentiates Itself:
SHRM represents the intersection of HRM and strategy. By integrating the
two, SHRM seeks to position human resources as a source of competitive
advantage.
- Contingency Approach emphasizes the alignment of HR policies
with the firm's strategy, often referred to as achieving a "best fit" or
vertical alignment.
- Configurational Theory highlights the internal consistency of HR
practices, known as horizontal alignment or “bundling,” where
practices are related and mutually supportive.
How Human Resources Contribute to Sustained Competitive
Advantage:
Human resources can drive sustained competitive advantage through two
key mechanisms:
1. Human Capital Advantage:
This occurs when the workforce is of high quality, meaning
employees are skilled, motivated, and adaptable.
2. Human Process Advantage:
This is achieved when a firm has established effective processes that
enable employees to work cohesively and efficiently.
Both mechanisms are heavily influenced by HRM practices and systems,
which must be strategically designed and implemented.
When Do Human Resources Lead to Sustained Competitive
Advantage?
According to the Resource-Based View of the Firm (RBV), competitive
advantage arises from a firm’s unique configuration of internal resources.
For human resources to contribute to this advantage, two conditions must
be met:
- Resources and capabilities must vary significantly across firms
(heterogeneity).
- These differences must be stable and difficult to transfer or replicate
(resource immobility).
,The VRIO Framework provides criteria for assessing whether resources
can sustain competitive advantage. Resources must be:
- Valuable: Contribute to organizational goals.
- Rare: Not widely possessed by competitors.
- Difficult to Imitate: Not easily replicated or substituted.
- Organized: Supported by systems and structures that enable their
effective utilization.
Clustering of HR Practices (HRPs):
HR practices can be conceptualized in two primary ways:
1. Control vs. Commitment:
The control approach emphasizes strict rules, supervision, and
punishment.
The commitment approach focuses on fostering employee
loyalty through training, rewards, and empowerment.
Continuum? No, independent, can be simultaneously
implemented
2. AMO Framework (Ability, Motivation, Opportunity):
Ability: HR practices aim to ensure a skilled workforce
through comprehensive recruitment, rigorous selection, and
training.
Motivation: Practices like performance management,
competitive compensation, incentives, and job security ensure
motivated employees.
Opportunity: Practices such as flexible job design, work
teams, and employee involvement empower employees to
achieve organizational objectives.
, Together, these frameworks explain how HRM enhances organizational
performance by increasing employee abilities, motivation, and
opportunities.
IMPORTANT
- SHRM is about aligning HRM with Strategy
- Horizontal and vertical alignment are important!
- Managing HR (people!) is important as they provide human capital
advantage and human process advantage
- Competitive advantage through VRIO
- Who is in the pool (capital) and how they behave (process) is
influenced by HRPs
- HRPs are clustered in HR systems
Control versus commitment
AMO
Features of HRM Systems:
HR systems have two critical dimensions:
1. Content:
This dimension defines what HR systems include, such as individual
practices and policies designed to achieve organizational objectives.
Content is driven by the organization’s strategic goals and may
include high-performance work systems or best practices
tailored to achieve a best fit.
2. Process:
This dimension explains how HR systems are designed and
administered. Strong systems deliver unambiguous messages,
creating shared meaning across the workforce about desired
behaviors. Effective design and implementation ensure that HR
systems are impactful and aligned with organizational goals.
